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Market Overview - The stock market opened higher on Friday, with Wall Street remaining unfazed by the ongoing U.S. government shutdown [2] - The Nasdaq Composite and S&P 500 reached new intraday record highs despite the shutdown entering its second day [2] - The prediction market Kalshi indicates a 69% chance that the shutdown will last more than 10 days [2] Economic Reports - Investors are closely monitoring upcoming economic reports, although the reliability of government data is in question due to the shutdown [3] - Key reports expected next week include the CB Employment Trends Index, Exports, Imports, Trade Balance, Atlanta Fed GDP, and Consumer Credit [3] - Additional reports on FOMC Minutes, MBA Mortgage Applications, Construction Spending, Gasoline Production, Jobless Claims, and Wholesale Inventories are also anticipated [3] Earnings Reports - Several companies are scheduled to report earnings next week, including Constellation Brands, PepsiCo, Delta Air Lines, Levi Strauss, Tilray, and Unity Bancorp [4] - Specific earnings spotlight dates include Constellation Brands and Aehr Test Systems on October 6, and McCormick & Co on October 7 [5]

Core Viewpoint - Unity Bancorp (UNTY) is anticipated to report a year-over-year increase in earnings driven by higher revenues for the quarter ended September 2025, with a consensus outlook suggesting a positive earnings picture [1][3] Earnings Expectations - The consensus EPS estimate for Unity Bancorp is $1.28 per share, reflecting a year-over-year increase of +19.6% [3] - Expected revenues are projected to be $31.81 million, which is a 15% increase from the same quarter last year [3] Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [4] - The Most Accurate Estimate for Unity Bancorp is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.39% [11] Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [9] - Unity Bancorp currently holds a Zacks Rank of 2, suggesting a high likelihood of beating the consensus EPS estimate [11] Historical Performance - In the last reported quarter, Unity Bancorp exceeded the expected earnings of $1.17 per share by delivering $1.20, resulting in a surprise of +2.56% [12] - The company has successfully beaten consensus EPS estimates in all of the last four quarters [13] Conclusion - Unity Bancorp is positioned as a compelling candidate for an earnings beat, but investors should consider additional factors beyond earnings expectations when making investment decisions [16]

Core Insights - Equity markets have experienced volatility in August after a strong performance since mid-June, influenced by tariff policies and inflationary pressures [1] - Investors are advised to focus on stocks with a history of steady dividend payouts to protect their portfolios during market fluctuations [2] Investment Opportunities - Four small and mid-cap banks have recently announced dividend increases: Bank7 Corp. (BSVN), Unity Bancorp, Inc. (UNTY), Stock Yards Bancorp, Inc. (SYBT), and BayCom Corp (BCML) [3] - These banks have consistently raised their quarterly dividends, contributing to enhanced shareholder value, with stock prices increasing over 15% in the past year [3] Company Summaries - **Bank7 Corp. (BSVN)**: - Operates in Oklahoma, Texas, and Kansas with $1.83 billion in assets as of June 30, 2025 [7] - Announced a quarterly cash dividend of $0.27 per share, a 12.5% increase, with a forward dividend yield of 2.33% and a payout ratio of 21% [8] - Expected sales decline of 2.4% and earnings decrease of 13.4% in 2025 [9] - **Unity Bancorp, Inc. (UNTY)**: - Based in New Jersey with $2.93 billion in assets as of June 30, 2025 [11] - Increased its quarterly cash dividend to $0.15 per share, a 7.1% rise, with a forward dividend yield of 1.24% and a payout ratio of 12% [12] - Projected sales growth of 16.5% and earnings growth of 20.9% in 2025 [12] - **Stock Yards Bancorp, Inc. (SYBT)**: - Headquartered in Louisville, KY, providing services in Kentucky, Indiana, and Ohio [13] - Announced a dividend of $0.32 per share, a 3.2% increase, with a forward dividend yield of 1.66% and a payout ratio of 29% [14] - Anticipated sales growth of 11.1% and earnings growth of 17.2% in 2025 [14] - **BayCom Corp (BCML)**: - Operates through United Business Bank with $2.62 billion in assets as of June 30, 2025 [15] - Increased its quarterly cash dividend to $0.25 per share, a 25% rise, with a forward dividend yield of 3.53% and a payout ratio of 37% [16] - Expected sales growth of 3.6% and earnings growth of 5.2% in 2025 [17]

Core Viewpoint - Unity Bancorp, Inc. has declared a cash dividend of $0.15 per common share, reflecting confidence in its earnings strength and long-term growth trajectory [1][2]. Company Overview - Unity Bancorp, Inc. is headquartered in Clinton, New Jersey, with approximately $2.9 billion in assets and $2.2 billion in deposits [3]. - Unity Bank, the wholly owned subsidiary, provides financial services to retail, corporate, and small business customers through a branch network in New Jersey and Pennsylvania [3]. Dividend Declaration - The cash dividend of $0.15 per share is payable on September 19, 2025, to shareholders of record as of September 5, 2025 [1]. - The increase in the quarterly dividend demonstrates the company's commitment to delivering consistent shareholder returns while maintaining a disciplined approach to capital management [2].

[PART I CONSOLIDATED FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20CONSOLIDATED%20FINANCIAL%20INFORMATION) [ITEM 1 Consolidated Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Unity Bancorp, Inc. as of June 30, 2025, and for the three and six-month periods then ended, including balance sheets, income statements, comprehensive income, changes in shareholders' equity, cash flows, and detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to $2.93 billion from $2.65 billion at year-end 2024, driven by increases in net loans and cash, funded by higher deposits and borrowed funds, with shareholders' equity rising to $319.8 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | **$2,928,523** | **$2,654,017** | **$274,506** | **10.3%** | | Net Loans | $2,353,582 | $2,233,869 | $119,713 | 5.4% | | Total Securities | $139,348 | $145,028 | ($5,680) | -3.9% | | Cash and cash equivalents | $293,733 | $180,438 | $113,295 | 62.8% | | **Total Liabilities** | **$2,608,683** | **$2,358,434** | **$250,249** | **10.6%** | | Total Deposits | $2,187,366 | $2,100,313 | $87,053 | 4.1% | | Borrowed funds | $377,107 | $220,504 | $156,603 | 71.0% | | **Total Shareholders' Equity** | **$319,840** | **$295,583** | **$24,257** | **8.2%** | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) For Q2 2025, net income significantly increased to $16.5 million from $9.5 million in Q2 2024, with diluted EPS rising to $1.61 from $0.93, driven by a 21.9% increase in net interest income and a substantial rise in noninterest income, including a $3.6 million net security gain Key Income Statement Data (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | YoY Change | Six Months 2025 | Six Months 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $28,557 | $23,424 | +21.9% | $55,808 | $47,265 | +18.1% | | Provision for Credit Losses (Loans) | $1,725 | $266 | +548.5% | $3,083 | $907 | +239.9% | | Total Noninterest Income | $5,815 | $2,033 | +186.0% | $7,916 | $3,751 | +111.0% | | Total Noninterest Expense | $13,019 | $11,980 | +8.7% | $25,630 | $24,112 | +6.3% | | **Net Income** | **$16,491** | **$9,454** | **+74.4%** | **$28,089** | **$19,040** | **+47.5%** | | **Diluted EPS** | **$1.61** | **$0.93** | **+73.1%** | **$2.74** | **$1.86** | **+47.3%** | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q2 2025 was $16.4 million, up from $9.2 million in Q2 2024, driven by higher net income, with other comprehensive income primarily impacted by unrealized gains/losses on debt securities and cash flow hedges Comprehensive Income Summary (in thousands) | Period | Net Income | Other Comprehensive (Loss) Income, Net of Tax | Total Comprehensive Income | | :--- | :--- | :--- | :--- | | **Q2 2025** | $16,491 | ($93) | $16,398 | | **Q2 2024** | $9,454 | ($228) | $9,226 | | **Six Months 2025** | $28,089 | $182 | $28,271 | | **Six Months 2024** | $19,040 | ($343) | $18,697 | [Consolidated Statements of Changes in Shareholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased from $295.6 million at year-end 2024 to $319.8 million at June 30, 2025, primarily due to $28.1 million in net income, partially offset by dividends paid and treasury stock purchases - Key drivers of the change in shareholders' equity in the first six months of 2025 include net income of **$28.1 million**, offset by common stock dividends and treasury stock purchases[16](index=16&type=chunk) - The company declared and paid dividends of **$0.14 per share** in both Q1 and Q2 2025, an increase from the **$0.13 per share** paid in the same periods of 2024[16](index=16&type=chunk) - 50,000 shares of treasury stock were purchased at a cost of **$1.9 million** during the second quarter of 2025[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash and cash equivalents increased by $113.3 million, driven by $238.6 million in net cash from financing activities, partially offset by $117.9 million used in investing activities and $7.5 million used in operating activities Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($7,466) | $7,313 | | Net cash used in investing activities | ($117,850) | ($2,064) | | Net cash provided by (used in) financing activities | $238,611 | ($2,607) | | **Increase in cash and cash equivalents** | **$113,295** | **$2,642** | [Notes to the Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of significant accounting policies, fair value measurements, and breakdowns of major financial statement components, including securities and loan portfolios, credit quality, allowance for credit losses, derivative instruments, and regulatory capital adequacy - The company's loan portfolio is geographically concentrated in New Jersey, particularly within the counties where it operates[73](index=73&type=chunk) - During Q2 2025, the company converted a portion of its debt holdings in Patriot National Bancorp, Inc. into common stock and subsequently sold all **4.4 million shares**, realizing a gain of **$3.5 million** and releasing **$2.0 million** in credit loss reserves[63](index=63&type=chunk) - The Bank is subject to regulatory capital requirements and was considered 'well capitalized' as of June 30, 2025, with a Total risk-based capital ratio of **15.10%** against a **10.00%** requirement[120](index=120&type=chunk)[125](index=125&type=chunk) [ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=ITEM%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance and condition, focusing on the significant increase in net income for Q2 2025, driven by strong growth in net interest income, a higher net interest margin, and a one-time gain on the sale of securities, covering portfolios, asset quality, deposits, liquidity, and capital resources [Earnings Summary](index=56&type=section&id=Earnings%20Summary) Net income for Q2 2025 was $16.5 million ($1.61/share), a 74% increase from $9.5 million ($0.93/share) in Q2 2024, significantly impacted by a one-time pre-tax gain of $3.5 million and a $2.0 million credit loss release related to Patriot National Bancorp securities Key Performance Ratios | Ratio | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on average assets | 2.51% | 1.56% | | Return on average equity | 21.15% | 14.07% | | Net interest margin | 4.49% | 4.01% | | Efficiency ratio (non-GAAP) | 42.31% | 47.10% | - The increase in net income was attributed to a **21.9%** rise in net interest income and a **186.0%** increase in noninterest income, the latter being driven by the one-time securities sale[134](index=134&type=chunk)[138](index=138&type=chunk) [Net Interest Income](index=59&type=section&id=Net%20Interest%20Income) Tax-equivalent net interest income for Q2 2025 rose 21.9% year-over-year to $28.6 million, with the net interest margin expanding by 48 basis points to 4.49%, driven by higher yields on increased loan volume and a decrease in the average cost of interest-bearing liabilities - The increase in net interest income was primarily due to a **$192.9 million** increase in average loans and a **25 basis point** increase in the loan portfolio yield[148](index=148&type=chunk) - Interest expense decreased by **3.6%** YoY despite a **$113.6 million** increase in average interest-bearing liabilities, as the average cost of these liabilities fell from **3.37%** to **3.05%**[145](index=145&type=chunk)[148](index=148&type=chunk) [Financial Condition](index=67&type=section&id=Financial%20Condition) Total assets increased by 10.3% to $2.9 billion at June 30, 2025, from year-end 2024, led by a $121.9 million increase in total loans, particularly commercial and residential mortgages, supported by growth in deposits and borrowed funds - The loan portfolio grew **5.4%** to **$2.4 billion**, with commercial loans increasing by **$99.5 million** and residential mortgage loans by **$35.6 million**[174](index=174&type=chunk) - Total deposits increased to **$2.2 billion**, with growth across all categories, including a **$28.6 million** increase in time deposits and a **$23.8 million** increase in noninterest-bearing demand deposits[200](index=200&type=chunk) - Borrowed funds, primarily from the FHLB, increased to **$387.4 million** from **$230.8 million** at year-end 2024 to support liquidity and asset growth[203](index=203&type=chunk) [Asset Quality](index=75&type=section&id=Asset%20Quality) Asset quality indicators showed a mixed picture, with nonaccrual loans increasing to $15.8 million at June 30, 2025, from $13.1 million at year-end 2024, while potential problem loans decreased from $14.6 million to $12.1 million, and the allowance for credit losses to total loans ratio stood at 1.22% Asset Quality Metrics (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Nonaccrual Loans | $15.8 | $13.1 | $12.1 | | Potential Problem Loans | $12.1 | $14.6 | N/A | | Allowance for Credit Losses | $29.0 | $26.8 | $26.1 | [Liquidity and Capital Resources](index=81&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position, with cash and cash equivalents increasing by $113.3 million in the first half of 2025, supported by significant borrowing capacity from the FHLB and FRB, and the bank remains well capitalized - At June 30, 2025, the company had **$212.0 million** of additional credit available at the FHLB and **$225.8 million** at the FRB[204](index=204&type=chunk)[214](index=214&type=chunk) - Total available funding plus cash on hand represented **168.8%** of uninsured or uncollateralized deposits as of June 30, 2025[214](index=214&type=chunk) [ITEM 3 Quantitative and Qualitative Disclosures about Market Risk](index=85&type=section&id=ITEM%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk, with an analysis as of June 30, 2025, showing that a +200 basis point rate shock would decrease Economic Value of Equity (EVE) by 11.31% and Net Interest Income (NII) by 4.61%, remaining within Board-approved tolerance levels Interest Rate Sensitivity Analysis (June 30, 2025) | Rate Shock (bps) | Change in EVE (%) | Change in NII (%) | | :--- | :--- | :--- | | +300 | (17.53)% | (7.25)% | | +200 | (11.31)% | (4.61)% | | +100 | (5.16)% | (2.21)% | | -100 | 0.07% | 0.74% | [ITEM 4 Controls and Procedures](index=85&type=section&id=ITEM%204%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, concluding they were effective, with no significant changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective for timely and accurate reporting as required by the SEC[220](index=220&type=chunk) [PART II OTHER INFORMATION](index=87&type=section&id=PART%20II%20OTHER%20INFORMATION) [ITEM 1 Legal Proceedings](index=87&type=section&id=ITEM%201%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business, financial condition, or results of operations - There are no material legal proceedings pending against the company[222](index=222&type=chunk) [ITEM 1A Risk Factors](index=87&type=section&id=ITEM%201A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - Risk factors remain consistent with those reported in the 2024 Form 10-K[223](index=223&type=chunk) [ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=ITEM%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, the company repurchased 50,000 shares of its common stock at a weighted average price of $38.78 per share under its publicly announced repurchase plan, with 634,645 shares remaining available for repurchase Share Repurchase Activity (Q2 2025) | Period | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | April 2025 | 50,000 | $38.78 | | May 2025 | 0 | N/A | | June 2025 | 0 | N/A | [ITEM 6 Exhibits](index=88&type=section&id=ITEM%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include the CEO and CFO certifications as required by the Sarbanes-Oxley Act of 2002, and the Interactive Data Files (XBRL) - Exhibits filed include Sarbanes-Oxley Section 302 and 906 certifications and XBRL data files[225](index=225&type=chunk)[227](index=227&type=chunk)

分组1 - Unity Bancorp reported quarterly earnings of $1.2 per share, exceeding the Zacks Consensus Estimate of $1.17 per share, and up from $0.93 per share a year ago, representing an earnings surprise of +2.56% [1] - The company posted revenues of $34.37 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 13.93%, compared to year-ago revenues of $25.46 million [2] - Unity Bancorp has outperformed the S&P 500 with a share price increase of about 20.7% since the beginning of the year, while the S&P 500 gained 6.6% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $1.24 on revenues of $31.31 million, and for the current fiscal year, it is $4.83 on revenues of $122.85 million [7] - The Zacks Industry Rank for Banks - Northeast is currently in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[Executive Summary of Financial Results](index=2&type=section&id=1.%20Executive%20Summary%20of%20Financial%20Results) Unity Bancorp reported significant increases in net income and diluted EPS for Q2 2025 and YTD, driven by one-time gains, alongside growth in loans, deposits, and improved capital ratios [Overall Financial Performance](index=2&type=section&id=1.1%20Overall%20Financial%20Performance) Unity Bancorp reported significant increases in net income and diluted EPS for Q2 2025 and the six months ended June 30, 2025, primarily driven by pre-tax one-time gains from securities sales and a release for credit losses on securities Net Income and Diluted EPS (in millions) | Period | Net Income | Diluted EPS | | :----- | :--------- | :---------- | | Q2 2025 | $16.5 | $1.61 | | Q1 2025 | $11.6 | $1.13 | | YTD June 30, 2025 | $28.1 | $2.74 | | YTD June 30, 2024 | $19.0 | $1.86 | - The increase in net income for both the three and six months ended June 30, 2025, was partially attributable to pre-tax **one-time gains of $3.5 million** realized on the sale of securities and a **$2.0 million release for credit losses on securities**, related to Patriot National Bancorp, Inc. securities[3](index=3&type=chunk) [Second Quarter Earnings Highlights](index=2&type=section&id=1.2%20Second%20Quarter%20Earnings%20Highlights) Net interest income increased by $1.3 million, and Net Interest Margin (NIM) rose to 4.49% in Q2 2025. Noninterest income surged due to a one-time gain from securities sales, while noninterest expenses saw increases in compensation and loan-related categories Key Earnings Metrics (Q2 2025 vs. Q1 2025) (in millions, except for percentages) | Metric | Q2 2025 | Q1 2025 | Change | | :---------------------- | :---------- | :---------- | :------- | | Net interest income | $28.6 | $27.3 | +$1.3 | | Net interest margin (NIM) | 4.49% | 4.46% | +3 bps | | Provision for credit losses on loans | $1.7 | $1.4 | +$0.3 | | Noninterest income | $5.8 | $2.1 | +$3.7 | | Noninterest expense | $13.0 | $12.6 | +$0.4 | | Effective tax rate | 23.4% | 24.8% | -1.4% | | Realized gain on sale of securities | $3.5 | - | +$3.5 | | Release for credit losses on securities | $2.0 | - | +$2.0 | - The increase in net interest income was due to the **yield on interest-earning assets increasing**[6](index=6&type=chunk) - The **$3.7 million increase in noninterest income** was primarily due to a **one-time realized gain of $3.5 million** from the sale of Patriot National Bancorp, Inc. common stock[6](index=6&type=chunk) [Balance Sheet Highlights](index=2&type=section&id=1.3%20Balance%20Sheet%20Highlights) Total gross loans and deposits experienced growth from December 31, 2024, with commercial and residential mortgage loans being key drivers. Shareholders' equity increased, contributing to a higher book value per common share, while borrowed funds also saw a significant rise Key Balance Sheet Metrics (June 30, 2025 vs. December 31, 2024) (in millions, except for percentages) | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total gross loans | $2,382.6 | $2,260.7 | +$121.9 | +5.4% | | Total deposits | $2,187.4 | $2,100.3 | +$87.1 | +4.1% | | Borrowed funds | $377.1 | $220.5 | +$156.6 | +71.0% | | Shareholders' equity | $319.8 | $295.6 | +$24.2 | +8.2% | | Book value per common share | $31.88 | $29.48 | +$2.40 | +8.1% | - Loan growth was primarily due to increases in **commercial and residential mortgage loan categories**, partially offset by decreases in residential construction loans[6](index=6&type=chunk) - As of June 30, 2025, **19.5% of total deposits were uninsured or uncollateralized**. Borrowed funds were entirely comprised of borrowings from the FHLB[6](index=6&type=chunk) [Other Key Highlights](index=3&type=section&id=1.4%20Other%20Key%20Highlights) Unity Bancorp, with approximately $2.9 billion in assets, demonstrated improved regulatory capital ratios and strong liquidity. The company plans to expand its branch network and was recognized on the Hovde Group's annual high-performer list - Unity Bancorp, Inc. is headquartered in Clinton, New Jersey, with approximately **$2.9 billion in assets** and **$2.2 billion in deposits**[7](index=7&type=chunk) Regulatory Capital Ratios (June 30, 2025 vs. December 31, 2024) | Ratio | June 30, 2025 | December 31, 2024 | Change (bps) | | :-------------------------- | :------------ | :---------------- | :----------- | | Leverage Ratio | 12.50% | 12.22% | +28 | | Common Equity Tier 1 Capital Ratio | 13.96% | 13.90% | +6 | | Tier 1 Capital Ratio | 14.39% | 14.37% | +2 | | Total Capital Ratio | 15.65% | 15.62% | +3 | - The Company held **$293.7 million of cash and cash equivalents** and maintained approximately **$457.8 million of funding available**, representing **176.3% of uninsured or uncollateralized deposits**[9](index=9&type=chunk) - Nonaccrual assets decreased to **$15.8 million (0.54% of total assets)** from **$17.9 million (0.65% of total assets)** in the prior quarter. Unity Bank announced its intention to open a new branch in Madison, New Jersey, in Fall 2025, increasing total branches to 22. The company was included in the Hovde Group's annual high-performer list in April 2025[9](index=9&type=chunk) [Detailed Financial Statements and Data](index=4&type=section&id=2.%20Detailed%20Financial%20Statements%20and%20Data) This section provides a comprehensive overview of Unity Bancorp's financial position and performance through detailed balance sheets, income statements, net interest margin analysis, asset quality, and historical trends [Summary Financial Highlights](index=4&type=section&id=2.1%20Summary%20Financial%20Highlights%20(Table)) This section provides a condensed overview of Unity Bancorp's key financial metrics, including balance sheet data, income statement figures, performance ratios, share information, capital ratios, and credit quality indicators for various periods, highlighting significant quarter-over-quarter and year-over-year changes Balance Sheet Data (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | QTD % Change | YoY % Change | | :------------------------ | :------------ | :------------- | :------------ | :----------- | :----------- | | Total assets | $2,928,523 | $2,767,943 | $2,597,707 | 5.8% | 12.7% | | Total deposits | $2,187,366 | $2,175,398 | $2,010,831 | 0.6% | 8.8% | | Total gross loans | $2,382,594 | $2,345,130 | $2,170,535 | 1.6% | 9.8% | | Total shareholders' equity | $319,840 | $306,142 | $273,395 | 4.5% | 17.0% | Financial Data - Quarter to Date (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | QTD % Change | YoY % Change | | :-------------------------- | :------------ | :------------- | :------------ | :----------- | :----------- | | Net income | $16,491 | $11,598 | $9,454 | 42.2% | 74.4% | | Net income per common share - Diluted | $1.61 | $1.13 | $0.93 | 42.5% | 73.1% | Performance Ratios - Quarter to Date (annualized) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------ | :------------ | :------------- | :------------ | | Return on average assets | 2.51% | 1.83% | 1.56% | | Return on average equity | 21.15% | 15.56% | 14.07% | | Net interest margin | 4.49% | 4.46% | 4.01% | | Efficiency ratio** | 42.31% | 42.89% | 44.44% | 44.23% | 47.10% | [Consolidated Balance Sheets](index=6&type=section&id=2.2%20Consolidated%20Balance%20Sheets) The consolidated balance sheet shows a 10.3% increase in total assets from December 31, 2024, reaching $2.93 billion, driven by significant growth in cash and cash equivalents, loans, and FHLB stock. Total liabilities also increased by 10.6%, primarily due to higher borrowed funds and deposits Consolidated Balance Sheet (in thousands) | Metric | June 30, 2025 | December 31, 2024 | June 30, 2024 | Change from Dec 31, 2024 (%) | Change from Jun 30, 2024 (%) | | :-------------------------------- | :------------ | :---------------- | :------------ | :--------------------------- | :--------------------------- | | Total assets | $2,928,523 | $2,654,017 | $2,597,707 | 10.3% | 12.7% | | Cash and cash equivalents | $293,733 | $180,438 | $197,418 | 62.8% | 48.8% | | Total loans | $2,382,594 | $2,260,657 | $2,170,535 | 5.4% | 9.8% | | Total deposits | $2,187,366 | $2,100,313 | $2,010,831 | 4.1% | 8.8% | | Borrowed funds | $377,107 | $220,504 | $274,798 | 71.0% | 37.2% | | Total liabilities | $2,608,683 | $2,358,434 | $2,324,312 | 10.6% | 12.2% | | Total shareholders' equity | $319,840 | $295,583 | $273,395 | 8.2% | 17.0% | - Prepaid expenses and other assets increased significantly from **$9,311 thousand** at December 31, 2024, to **$48,750 thousand** at June 30, 2025[14](index=14&type=chunk) - Noninterest-bearing demand deposits increased by **5.4%** from December 31, 2024, and **10.1%** from June 30, 2024[14](index=14&type=chunk) [Consolidated Statements of Income](index=7&type=section&id=2.3%20Consolidated%20Statements%20of%20Income) This section presents Unity Bancorp's income statements for both the quarter and six months ended June 30, 2025, detailing interest income and expense, provisions for credit losses, noninterest income and expense, and ultimately net income and EPS, with comparative figures [QTD Consolidated Statements of Income](index=7&type=section&id=2.3.1%20QTD%20Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2025, net income significantly increased by 42.2% QoQ and 74.4% YoY, reaching $16.5 million. This growth was primarily driven by a substantial increase in noninterest income due to net securities gains and a strong rise in net interest income, despite higher provisions for credit losses on loans QTD Consolidated Statements of Income (in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | QTD Change ($) | QTD Change (%) | YoY Change ($) | YoY Change (%) | | :---------------------------------------- | :------------ | :------------- | :------------ | :------------- | :------------- | :------------- | :------------- | | Total interest income | $42,600 | $40,801 | $37,987 | $1,799 | 4.4% | $4,613 | 12.1% | | Total interest expense | $14,043 | $13,550 | $14,563 | $493 | 3.6% | $(520) | (3.6)% | | Net interest income | $28,557 | $27,251 | $23,424 | $1,306 | 4.8% | $5,133 | 21.9% | | Provision for credit losses, loans | $1,725 | $1,358 | $266 | $367 | 27.0% | $1,459 | 548.5% | | (Release) Provision for credit losses, securities | $(2,036) | - | $646 | $(2,036) | *NM | $(2,682) | *NM | | Total noninterest income | $5,815 | $2,101 | $2,033 | $3,714 | 176.8% | $3,782 | 186.0% | | Net securities gains (losses) | $3,600 | $(49) | $20 | $3,649 | *NM | $3,580 | *NM | | Total noninterest expense | $13,019 | $12,611 | $11,980 | $408 | 3.2% | $1,039 | 8.7% | | Net income | $16,491 | $11,598 | $9,454 | $4,893 | 42.2% | $7,037 | 74.4% | | Net income per common share - Diluted | $1.61 | $1.13 | $0.93 | | | | | [YTD Consolidated Statements of Income](index=8&type=section&id=2.3.2%20YTD%20Consolidated%20Statements%20of%20Income) For the six months ended June 30, 2025, net income increased by 47.5% YoY to $28.1 million. This was driven by an 18.1% increase in net interest income and a substantial 111.0% rise in total noninterest income, largely due to net securities gains, despite a significant increase in the provision for credit losses on loans YTD Consolidated Statements of Income (in thousands) | Metric | June 30, 2025 | June 30, 2024 | YoY Change ($) | YoY Change (%) | | :---------------------------------------- | :------------ | :------------ | :------------- | :------------- | | Total interest income | $83,401 | $75,924 | $7,477 | 9.8% | | Total interest expense | $27,593 | $28,659 | $(1,066) | (3.7)% | | Net interest income | $55,808 | $47,265 | $8,543 | 18.1% | | Provision for credit losses, loans | $3,083 | $907 | $2,176 | 239.9% | | (Release) Provision for credit losses, securities | $(2,036) | $646 | $(2,682) | *NM | | Total noninterest income | $7,916 | $3,751 | $4,165 | 111.0% | | Net securities gains | $3,551 | $74 | $3,477 | *NM | | Total noninterest expense | $25,630 | $24,112 | $1,518 | 6.3% | | Net income | $28,089 | $19,040 | $9,049 | 47.5% | | Net income per common share - Diluted | $2.74 | $1.86 | | | [Net Interest Margin Analysis](index=9&type=section&id=2.4%20Net%20Interest%20Margin%20Analysis) This section provides a detailed analysis of Unity Bancorp's net interest margin, comparing average balances, interest income/expense, and rates/yields for interest-earning assets and interest-bearing liabilities across different periods (QTD and YTD) [QTD Net Interest Margin (June 30, 2025 vs. June 30, 2024)](index=9&type=section&id=2.4.1%20QTD%20Net%20Interest%20Margin%20(June%2030%2C%202025%20vs.%20June%2030%2C%202024)) For Q2 2025, the net interest margin improved to 4.49% from 4.01% in Q2 2024, driven by a higher yield on interest-earning assets (6.70% vs. 6.51%) and a lower cost of interest-bearing liabilities (3.05% vs. 3.37%) QTD Net Interest Margin (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Yield on interest-earning assets | 6.70% | 6.51% | | Cost of interest-bearing liabilities | 3.05% | 3.37% | | Net interest spread | 3.66% | 3.13% | | Net interest income | $28,557 | $23,424 | | Net interest margin | 4.49% | 4.01% | [QTD Net Interest Margin (June 30, 2025 vs. March 31, 2025)](index=10&type=section&id=2.4.2%20QTD%20Net%20Interest%20Margin%20(June%2030%2C%202025%20vs.%20March%2031%2C%202025)) The net interest margin slightly increased to 4.49% in Q2 2025 from 4.46% in Q1 2025. This was supported by a marginal increase in the yield on interest-earning assets (6.70% vs. 6.68%) and a slight rise in the cost of interest-bearing liabilities (3.05% vs. 3.04%) QTD Net Interest Margin (June 30, 2025 vs. March 31, 2025) | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :------------ | :------------- | | Yield on interest-earning assets | 6.70% | 6.68% | | Cost of interest-bearing liabilities | 3.05% | 3.04% | | Net interest spread | 3.66% | 3.64% | | Net interest income | $28,557 | $27,251 | | Net interest margin | 4.49% | 4.46% | [YTD Net Interest Margin (June 30, 2025 vs. June 30, 2024)](index=11&type=section&id=2.4.3%20YTD%20Net%20Interest%20Margin%20(June%2030%2C%202025%20vs.%20June%2030%2C%202024)) For the six months ended June 30, 2025, the net interest margin improved to 4.48% from 4.05% in the prior year period. This was driven by an increase in the yield on interest-earning assets (6.69% vs. 6.51%) and a decrease in the cost of interest-bearing liabilities (3.04% vs. 3.32%) YTD Net Interest Margin (June 30, 2025 vs. June 30, 2024) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Yield on interest-earning assets | 6.69% | 6.51% | | Cost of interest-bearing liabilities | 3.04% | 3.32% | | Net interest spread | 3.65% | 3.19% | | Net interest income | $55,808 | $47,265 | | Net interest margin | 4.48% | 4.05% | [Allowance for Credit Losses and Asset Quality Schedules](index=12&type=section&id=2.5%20Allowance%20for%20Credit%20Losses%20and%20Asset%20Quality%20Schedules) This section details the allowance for credit losses, including provisions, chargeoffs, and recoveries, and provides key asset quality metrics such as nonaccrual loans and assets, showing trends over several quarters Allowance for Credit Losses (in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Balance, beginning of period | $27,651 | $26,788 | $27,002 | $26,107 | $26,080 | | Provision for credit losses on loans | $1,725 | $1,358 | $470 | $1,029 | $266 | | Net chargeoffs | $(364) | $(495) | $(684) | $(134) | $(239) | | Balance, end of period | $29,012 | $27,651 | $26,788 | $27,002 | $26,107 | Asset Quality Information | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :---------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Nonaccrual assets | $15,840 | $17,990 | $15,046 | $15,879 | $15,193 | | Nonaccrual loans to total loans | 0.66% | 0.72% | 0.58% | 0.59% | 0.56% | | Allowance for credit losses to total loans at quarter end | 1.22% | 1.18% | 1.18% | 1.22% | 1.20% | | Allowance for credit losses to total nonaccrual loans | 183.16% | 164.15% | 204.77% | 207.39% | 215.37% | [Quarterly Financial Data (Historical Trend)](index=13&type=section&id=2.6%20Quarterly%20Financial%20Data%20(Historical%20Trend)) This section provides a comprehensive historical view of Unity Bancorp's financial performance and position over the past five quarters, covering income, share data, performance ratios, balance sheet items, interest rates, credit quality, and capital ratios Summary of Income (in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :---------------------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Net interest income | $28,557 | $27,251 | $26,490 | $24,856 | $23,424 | | Net income | $16,491 | $11,598 | $11,505 | $10,905 | $9,454 | | Net income per common share - Diluted | $1.61 | $1.13 | $1.13 | $1.07 | $0.92 | Performance Ratios (Annualized) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Return on average assets | 2.51% | 1.83% | 1.83% | 1.76% | 1.56% | | Return on average equity | 21.15% | 15.56% | 15.77% | 15.55% | 14.07% | | Net interest margin | 4.49% | 4.46% | 4.37% | 4.16% | 4.01% | | Efficiency ratio** | 42.31% | 42.89% | 44.44% | 44.23% | 47.10% | Balance Sheet Data (in thousands) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :------------------------ | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Total assets | $2,928,523 | $2,767,943 | $2,654,017 | $2,635,319 | $2,597,707 | | Total loans | $2,382,594 | $2,345,130 | $2,260,657 | $2,217,393 | $2,170,535 | | Total deposits | $2,187,366 | $2,175,398 | $2,100,313 | $2,046,137 | $2,010,831 | | Total shareholders' equity | $319,840 | $306,142 | $295,583 | $284,257 | $273,395 | [Loan Portfolio Composition](index=14&type=section&id=2.7%20Loan%20Portfolio%20Composition) This section details the composition of Unity Bancorp's loan portfolio as of June 30, 2025, and December 31, 2024, highlighting the distribution across various loan categories, with commercial loans representing the largest segment Loan Portfolio Composition (in thousands) | Loan Category | June 30, 2025 | June 30, 2025 (%) | December 31, 2024 | December 31, 2024 (%) | | :------------------------------ | :------------ | :---------------- | :---------------- | :-------------------- | | Loans Held for Sale | $13,352 | 0.6% | $12,163 | 0.5% | | SBA Loans | $38,059 | 1.6% | $38,309 | 1.7% | | **Total Commercial Loans** | **$1,511,129** | **63.4%** | **$1,411,629** | **62.5%** | | Residential Mortgage Loans | $666,560 | 28.0% | $630,927 | 27.9% | | **Total Consumer Loans** | **$82,564** | **3.4%** | **$76,711** | **3.4%** | | Residential Construction Loans | $70,930 | 3.0% | $90,918 | 4.0% | | **Total Gross Loans** | **$2,382,594** | **100.0%** | **$2,260,657** | **100.0%** | - Commercial mortgage - owner occupied loans represent the **largest single category** within the commercial loan portfolio, accounting for **26.5% of total gross loans** at June 30, 2025[31](index=31&type=chunk) - Residential construction loans decreased from **4.0% of total gross loans** at December 31, 2024, to **3.0%** at June 30, 2025[31](index=31&type=chunk) [Quarterly Non-GAAP Reconciliation](index=15&type=section&id=2.8%20Quarterly%20Non-GAAP%20Reconciliation) This section provides a reconciliation of GAAP net income and related performance metrics to adjusted non-GAAP figures for the quarter ended June 30, 2025, by excluding the impact of one-time securities sales and related credit loss releases Adjusted Net Income (non-GAAP, in thousands) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------------------- | :------------ | :------------- | :------------ | | Net income (GAAP) | $16,491 | $11,598 | $9,454 | | Less: Release of credit losses, securities | $(2,036) | - | - | | Less: Net securities gains pertaining to one-time sales | $(3,509) | - | - | | Add: Adjusted (provision) for income taxes | $1,301 | - | - | | Adjusted net income (non-GAAP) | $12,247 | $11,598 | $9,454 | Adjusted Performance Ratios (non-GAAP) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :---------------------------------------- | :------------ | :------------- | :------------ | | Adjusted net income per common share - Diluted (non-GAAP) | $1.20 | | | | Adjusted return on average assets (non-GAAP) | 1.86% | | | | Adjusted return on average equity (non-GAAP) | 15.70% | | | [Forward-Looking Statements](index=3&type=section&id=3.%20Forward-Looking%20Statements) This section serves as a cautionary statement regarding forward-looking information, indicating that such statements involve risks, uncertainties, estimates, and assumptions beyond the company's control, which could impact future financial performance - The news release contains forward-looking statements, identified by words such as "**believe**", "**expect**", "**intend**", "**anticipate**", "**estimate**", "**project**" or similar expressions[8](index=8&type=chunk) - These statements involve certain risks, uncertainties, estimates, and assumptions made by management, which are subject to factors beyond the Company's control that could impede its ability to achieve these goals[8](index=8&type=chunk) - Factors include those items in the Annual Report on Form 10-K under "**Item IA-Risk Factors**", general economic conditions, trends in interest rates, borrower repayment ability, nonperforming asset management, regulatory exams, and the impact of health crises or national disasters[8](index=8&type=chunk)

Core Viewpoint - Unity Bancorp, Inc. reported a record net income of $16.5 million for Q2 2025, reflecting strong financial performance driven by one-time gains and stable credit quality [1][2][3] Financial Performance - Net income for Q2 2025 was $16.5 million, or $1.61 per diluted share, compared to $11.6 million, or $1.13 per diluted share in Q1 2025 [1] - For the first half of 2025, net income reached $28.1 million, or $2.74 per diluted share, up from $19.0 million, or $1.86 per diluted share in the same period of 2024 [1] - The increase in net income was partially due to one-time pre-tax gains of $3.5 million from the sale of securities and a $2.0 million release for credit losses on securities [1] Return on Assets and Equity - The company achieved a return on assets (ROA) of 2.51% and a return on equity (ROE) of 21.15% for the quarter [2] - On a non-GAAP basis, net income was $12.2 million, or $1.20 per diluted share, with a ROA of 1.86% and a ROE of 15.70% [4] Lending and Deposit Growth - Loan balances increased by $37.5 million in Q2 2025, representing a 1.6% increase from Q1 2025 and a 5.4% increase from year-end [5] - Total deposits grew by $12.0 million, or 0.6% from Q1 2025, and 4.1% since year-end [5] - Credit quality remained stable, with nonaccrual assets as a percentage of total assets declining to 0.54% [5] Future Outlook - The company is optimistic about future growth due to strong loan demand and anticipated economic growth, supported by recent inflation data indicating price stabilization [6]